Law Summary

1. Grant of Franchise

• Legal Principle/Provision: Republic Act No. 1431 grants Rosiano Rodano a franchise to construct, maintain, and operate an electric light, heat, and power system in Malaybalay, Bukidnon, for 25 years.
• Key Definitions Introduced:
  • "Franchise" refers to the right, privilege, and authority granted to operate an electric system.
• Important Requirements/Procedures:
  • The franchise is subject to the terms of Act No. 3636 and Commonwealth Act No. 132.
• Relevant Timeframes:
  • The franchise is valid for a period of 25 years from the date of approval of the Act (June 14, 1956).

• Rosiano Rodano is the grantee of the franchise. • The franchise allows for the generation and distribution of electric light, heat, and power for sale.

2. Corporation Formation and Franchise Assignment

• Legal Principle/Provision: The grantee is authorized to organize a corporation to which he may sell or assign the franchise under specific conditions.
• Key Definitions Introduced:
  • "Corporation" refers to the entity formed to operate under this franchise.
• Important Requirements/Procedures:
  • The corporation must not lease, transfer, grant usufruct, sell, or assign the franchise without Congressional approval.
  • The corporation must adhere to existing corporation laws in the Philippines.
• Relevant Timeframes:
  • No specific timeframes mentioned for corporation formation.

• The franchise remains subject to the same conditions regardless of assignment. • Any entity acquiring the franchise inherits all rights and restrictions.

3. Relationship with the National Power Corporation

• Legal Principle/Provision: The National Power Corporation is authorized to negotiate rates for power supplied to the grantee for public consumers.
• Key Definitions Introduced:
  • "National Power Corporation" refers to the government entity responsible for electric power generation.
• Important Requirements/Procedures:
  • The grantee may engage with the National Power Corporation for procurement of electric heat and power.
• Relevant Timeframes:
  • Not specified.

• This provision emphasizes consumer protection regarding pricing. • The National Power Corporation acts on behalf of public consumers.

4. Government Rights to Franchise

• Legal Principle/Provision: The government has the right to take over the electric system and requires the grantee to surrender the franchise and equipment.
• Key Definitions Introduced:
  • "Serviceable equipment" refers to the operational assets of the electric system.
• Important Requirements/Procedures:
  • Upon government takeover, the grantee must transfer all serviceable equipment at cost minus reasonable depreciation.
• Relevant Timeframes:
  • Not specified.

• This clause protects public interest by allowing government intervention if necessary. • Depreciation is factored into the transfer price.

5. Effectivity of the Act

• Legal Principle/Provision: The Act takes effect upon its approval.
• Key Definitions Introduced:
  • "Effectivity" refers to the commencement of the law's enforcement.
• Important Requirements/Procedures:
  • Approval date is June 14, 1956.
• Relevant Timeframes:
  • Immediate upon approval.

• The Act is officially recognized and enforceable from the date of approval.

Key Takeaways

• Rosiano Rodano is granted a 25-year franchise to operate an electric system in Malaybalay.
• The franchise includes strict conditions regarding assignment and transfer, ensuring Congressional oversight.
• Provisions exist for collaboration with the National Power Corporation for public benefit.
• The government retains rights to assume control of the franchise and related equipment if necessary.
• The law becomes effective immediately upon approval, facilitating prompt implementation of the franchise.